A common element in several retinal diseases is the accumulation of fluid within the extracellular space of the neurosensory retina. In its various forms, broadly-termed retinal edema is a leading cause of vision loss in Western countries. Therefore, it has an enormous social and economic impact. Initial studies concluded that the principle source of the extracellular fluid was leakage from inner retina vessels. But subsequent studies have demonstrated that alterations in the retinal pigment epithelium (RPE) also contribute to the development of retinal edema. Despite its origin, the removal of extracellular fluid from the retina is dependent on the RPE. Our long-term objective is to understand how endogenous and environmental factors influence RPE function and contribute to the development and resolution of edematous fluid. Vascular endothelial growth factor (VEGF) is required for normal vascular development in the choroid, but it is also the principle cytokine responsible for neovascularization in many proliferative eye diseases. In addition to its role as an endothelial mitogen, VEGF regulates retinal vasculature and RPE permeability as well. Several studies have shown that anti-VEGF therapies are efficacious in treating not only proliferative disorders within the eye, but also retinal edema. The RPE is a primary source of VEGF in the eye. We and others have shown that oxidative stress not only enhances VEGF secretion, but directs most of this new VEGF toward the apical RPE surface. This increase in VEGF at the apical surface of the RPE can alter the barrier function and secretory properties of the tissue. The actions of VEGF are antagonized by pigment-epithelium-derived factor (PEDF), secreted by the RPE at the apical surface. We have recently shown that a central component of the anti-VEGF actions of PEDF in the RPE is the ectodomain shedding of VEGF-R2 by a mechanism requiring the activation of g- secretase. Based on these data, we hypothesize that oxidative stress suppresses the juxtamembrane protease system required for normal RPE function. This hypothesis links oxidative stress to the early events in the development of retinal edema. When the juxtamembrane proteolytic activity declines (i.e., diabetes, aging, or inflammation) in response to a reduced PEDF to VEGF ratio, VEGF-R2 stability and activity are enhanced, disrupting RPE function and leading to the development of edema and eventual vision loss. This application proposes three Aims to investigate how oxidative stress, receptor dynamics, and specific proteolytic systems interact to modulate RPE function and the development of retinal edema. We will primarily use oxidative stress and PEDF/VEGF interactions to model these events, but a limited number of experiments are proposed to investigate the shedding of the advanced glycation end-product receptor (RAGE). Aim 1 will determine the effects of PEDF on oxidative-stress- and VEGF-mediated RPE breakdown, Aim 2 will characterize the PEDF- stimulated VEGF- and RAGE-receptor processing by juxtamembrane proteases, and Aim 3 will elucidate the consequences of juxtamembrane protease inhibition in vivo.